The IDB has approved a $700m loan to finance the modernization of the turbines of Venezuela’s Guri hydroelectric project, increasing power by 795MW. Venezuela will contribute a total of $609m in counterpart funds to the project, which will have a total cost around $1.3bn. The IDB loan is for 20 years, with a 6-year grace period and an interest rate based on Libor. Separately, the IDB has approved a $120m loan to the Dominican Republic to help enhance competitiveness. The IDB financing consists of a $110m loan with an amortization of 20 years, a grace period of 5 years and an interest rate based on Libor. The other $10m loan has an amortization of 15 years, a grace period of 5 years and an interest rate based on Libor. The multilateral does not comment on the loan spreads.
Category: Regions
Digicel Taps CEO for Honduras
Jamaica-based cell phone company Digicel says it has appointed Damian Blackburn as CEO of its Honduras operations. Blackburn, who had previously been regional CEO overseeing 12 Caribbean markets, joined Digicel 2.5 years ago. He replaces Ghada Gebara, who left the company after 5 years to pursue private projects.
Colombia Rates Seen Steady
The market expects Colombia’s central bank to keep its monetary policy rate on hold at 3.00% today. Morgan Stanley says growth is in line with expectations and inflation remains below target. It expects the rate to tighten to 6.00% by the end of 2011. Barclays also sees the rate on hold with tightening beginning in April, although it says there is a risk it could begin later in the year.
Alfa Heard Bringing Acquisition Loan
Mexican conglomerate Alfa is understood to have mandated a syndicated loan to back the $600m purchase of Eastman Chemical assets in the US. A $600m 3-year bullet facility is expected to be syndicated next month. Credit Suisse and HSBC are heard as the leads on the deal that hits a LatAm bank market starved for assets and hungry for yield. The purchase of Eastman’s polyethylene terephthalate resins business and related assets and technology of its Performance Polymers segment was done by Alfa unit DAK Americas. BAML advised Eastman while HSBC is understood to have worked on the buyside. Fitch Wednesday downgraded Alfa sub Grupo Petrotemex to BB (stable) from BB+, including notes issued by DAK, amid fears over leverage incurred in the purchase. On a pro forma basis, Fitch estimates that Petrotemex’s total debt-to-Ebitda, considering 12 months of Eastman assets operations, could reach 3.3x in 2010 and gradually decrease. This compares negatively with a total debt-to- Ebitda ratio of 2.2x for the 12 months to June 30, and fall outside Fitch’s prior leverage estimation of 2.0x to 2.5x. Nonetheless, Fitch notes that the investment is strategic and positive for Petrotemex, and should strengthen its business position, as it gains PET market share in North America. “It should also bring potential synergies to Petrotemex’s operations, provide the company with access to new technologies and improve its vertical integration,” says Fitch.
Analysts Like Bimbo/Sara Lee
A potential acquisition of Sara Lee’s bread business by Grupo Bimbo gets the approval of analysts, who say the deal would be non-dilutive to Sara Lee, while Bimbo would likely be able to improve the unit’s margins. Deutsche Bank runs potential Ebitda multiples for the acquisition under a variety of scenarios and prices. “The $1.3bn case should probably be everyone’s base case,” days Deutsche. It adds that this would be “attractive” if a sale includes all of Sara Lee’s baking assets, such as operations in Spain and Australia. Deutsche says a $1.3bn price would yield a 7.2x EV to 2010 Ebitda and 6.6x 2011E Ebitda. If Bimbo were to pay the same price for only the North American assets, the multiple would rise to 13.0x to 2010A Ebitda. The Spanish operations include assets built by Bimbo’s founding family and later acquired by Sara Lee. According to Deutsche, Bimbo had tried and failed to reacquire the assets from Earthgrains. Meanwhile, Sara Lee would help expand Bimbo’s already significant presence in the US. The market now represents 43% of net sales, compared with the 46% that come from Mexico. Bimbo greatly expanded its presence in the US with the $2.5bn acquisition of Weston brands including US brands Arnold’s, Boboli, Brownberry, Entenmann’s, Freihofer’s, Stroehmann and Thomas’ in 2008. Acquiring Sara Lee would help provide Bimbo with more of a national footprint, with penetration of the Midwest, Southeast and Southwest markets, according to John Baumgartner, analyst with Telsey Advisory Group. In regions where Bimbo and Sara Lee overlap, Bimbo will be able to immediately consolidate delivery routes to improve operating margins, Baumgartner says. Bimbo declines to comment on speculation it is now the lead bidder for the business. Bimbo is said to have retained Atlas Advisors for the acquisition.
Banorte Welcomes New Chairman
Mexican financial group Banorte has named Guillermo Ortiz as its new chairman effective in March 2011. Ortiz was head of Banxico, Mexico’s central bank, until early 2010, when Agustin Carstens took the position. Current chairman Roberto Gonzalez will become chairman emeritus. The appointments must now be approved by company shareholders.
Infonavit Lands RMBS Jumbo
Mexico’s Infonavit has raised MXP3.37bn in UDI-denominated RMBS. The government-backed mortgage lender’s 2038 bonds pay a 4.15% fixed coupon, or Udibonos plus 295bp. Demand was 2.2x the offer, according to a banker on the deal. HSBC and Santander managed the sale, rated AAA on a national scale. Infonavit has sold MXP13.68bn this year of its mortgage backed bonds, commonly known as Cedevis.
Lenders Await Pemex Allocations
Bankers are keenly awaiting this week’s allocations on a Pemex $3.25bn dual-tranche loan. It has apparently received over $4bn worth of commitments from 15 banks, not including the leads, a fact that raises some eyebrows. “They are asking for pretty big tickets for tight pricing,” says a banker not on the deal. “It’s not that far from where banks have their own funding costs,” he adds. The deadline for commitments was 2 weeks ago. Sizeable tickets received include $250m from Sumitomo across both tranches, $150m from Intesa on the 5 year tranche, and $75m from EDC to the 3 year, according to market participants. The 3 year tranche is a $1.25bn revolver to replace a 2007 loan that matured in September that had been priced at 25bp+Libor, for which it is offering 125bp over Libor. Fees for participation in the range from 25bp-60bp for $100m, $75m, $50m and $35m tickets. Bookrunners on the tranche are Barclays, BBVA, Credit Agricole (admin agent) and RBS. Pemex also wants a new money 5 year term loan for $2bn at L+150bp. BBVA (admin agent), BNP Paribas, Credit Agricole, Citi, HSBC and Inbursa are bookrunners. Fees on the term loan range from 45bp to 85bp for $150m, $100m, $75m and $50m commitments.
Colpatria Issues Local Bonds
Colombian financial conglomerate Colpatria sold COP200bn ($108m) in 10-year subordinated bonds priced at par. The AA+ rated notes pay IPC plus 5.20% to yield 7.60%. Proceeds will be used for working capital. Colpatria led the sale itself.
Ecopetrol Local Gets OK
Colombian oil giant Ecopetrol has received authorization from the finance ministry to issue COP1trn ($543m) in local bonds. A company spokesman says that a date for the issue has not been set, but that it should happen by the end of the year. Proceeds will be used for capex. Correval and Valores Bancolombia will lead the sale, the spokesman says.